SCHOOL: HIGHER INSTITUTE OF

MANAGEMENT AND ENTREPRENEURSHIP(IME),

DOUALA
COURSE NAME: ENTREPRENEURSHIP
COURSE CODE:
COURSE INSTRUCTOR:Mr. TAKU ELVIS K.

Lecture 2:Generating Business Ideas

 OUTLINE
✓ Introduction
✓ Distinguishing business ideas from business
opportunity
✓ The Opportunity Factor
✓Generating a list of business ideas
✓ Screening your ideas
✓ Carrying out field study
✓ Your business idea at last
 INTRODUCTION
✓ Business is not about the idea of power, but the power of
ideas
✓ The starting point of any business organisation is a powerful
idea: An idea worth thinking about, an idea worth enhancing
and developing, an idea worth converting into a business.
✓ A Business idea is a Business seed, which expands and
grows into a Business tree.
✓ A Business idea is a concept that can be used for financial
gain that is usually centered on a product or service that can
be offered for money.
✓ An idea is the base of the pyramid when it comes to the
business as a whole
✓ A business idea is a short and precise description of the
basic operation of an intended business
BUSINESS IDEAS VERSUS OPPORTUNITIES
✓ Often used interchangeably, there’s actually a big difference
between an idea and an opportunity in business.
✓ Put simply: a business idea is a concept that could be used to
make money, and an opportunity has proven commercial value.
✓ Abusiness opportunity is an idea that has the potential to
become a viable enterprise, with a place in one or more markets
✓ A business idea is not necessarily a real opportunity. You need
to filter those business ideas, sifting through them, looking for the
opportunities.
✓ An idea is just that: It has no value unless you make a business
out of it. An opportunity is an idea that can be implemented, for
which resources are available, that will prosper.
✓ So business ideas are great but not really what makes the
difference. Make sure you have an opportunity, not just an idea.
 THE OPPORTUNITY FACTOR
✓ There are factors that qualify a business idea a business
opportunity.
1. Demand: How much does the market want the product?

2. Expertise: Do we have the know how? Do we master the

industry?

3. Resources: Do we have the resources necessary to create

the product?

4:Profitablity: Can we make money with this product?

5.Distribution: Can we get the product into the hands of the

consumers?

6. Proprietary Advantage: Do we have something unique?

 GENERATING A LIST OF IDEAS
✓ When generating business ideas, it is best to try to keep your
mind open to everything.
✓ Your first goal is to think of as many ideas as possible and
make a list of all the possible business opportunities.
✓ With a list, you will have more choices!
✓ You then can scan the list and nail down the idea(s) that
sound most feasible to you and that you think will be most
profitable.
✓ There are many ways to come up with business ideas, such
as surveying local businesses or asking existing business
owners.
✓ Below, we will examine a few different approaches to
generating business ideas.
✓However, note that the information gained from one approach
may supplement another and help you to clearly describe your
business ideas
 GENERATING A LIST OF IDEAS

Learning from
Draw from
Successful
Experience
Entrepreneurs

GENERATING
A LIST OF IDEAS

Survey your
Local business Brainstorming
Area
Environment
Scan your
 LEARNING FROM SUCCESSFUL
ENTREPRENEURS
✓ You can learn a lot from people in your area who have
already gone through the process of establishing a business.
✓ You should try to get the following information from them:
• What kind of idea did these businesses start with?
• Where did the ideas come from?
• How did they develop their ideas into successful businesses?
• How does the business profit and fit into the local
environment?
• Where did they get the money to start their business?
 DRAW FROM EXPERIENCE
a. Own Experience
✓ Look at the list of your interests, your experiences
✓ Are there any possible business ideas that you can
derive from your own past experience?
✓Think about each type of experience.
✓ What has been your experience as a customer in the
market place?
✓ Think about the goods and services you have wanted at
different times that you have had difficulty finding

b. Other people's
✓ Listen carefully to what people around you say about
their shopping experience
✓ Ask your family and friends about the things they
would like to find that are not locally available.
✓ Expand your by talking to people from different age
groups, social classes, etc. for a greater understanding of
the market.
 SURVEY YOUR LOCAL BUSINESS AREA
✓ Another way of discovering business ideas is to look
around your local community.
✓ Find out what type of businesses are already operating in
your area and see if you can identify any gaps in the market.
✓ If you live in a village or small town, you may be able to
identify all the fields of business in the whole town.
✓ Otherwise, you may need to focus on the preferred
business fields and business types that you identified above
✓ This is an activity that will be much easier to do with a
business partner or friend.
✓ Visit the closest industrial area, markets and shopping
centres in your area.
 SCANNING YOUR ENVIRONMENT
✓ It may be useful to think about business ideas by
considering all the resources and institutions in your area.
✓ For example think about
• Natural resources
• Characteristics and skills of people in the local community
• Import substitution
• Waste products
• Publications
• Trade fairs and exhibitions
 SCANNING THE ENVIRONMENT
a. Natural Resources
✓ Think of what is abundantly available in your area that
could be made into useful products without harming
the environment.
✓ Natural resources include materials from soil,
agriculture, forest, mineral, water, etc.
✓ Perhaps there is good clay soil in the area that can be
used for making bricks.
✓ It may be used for other business ventures such as
making plates, cups or tiles
✓ Think about a way to use this resource that would
enable you to continue working with it for many years.
✓ In other words, make sure that your business idea will
not exhaust the natural resource that would be the
foundation of your business
 SCANNING THE ENVIRONMENT
b. Skills of people in the local community
✓ Consider whether the people in your area have some special
characteristics or skills that could be useful for a business:
• Are there people in your community who are good artisans,
tailors or carpenters or who have specific skills creating items
unique to your area?
• Are there recent graduates looking for jobs who you could
employ?
• Are there caregivers, nurses or people who could offer services
to children, the elderly or the sick?
• Is your community digitally connected?
• Is the infrastructure in your community well developed
 SCANNING THE ENVIRONMENT
c. Waste Products
✓ Business opportunities can also be generated by using
materials that have been previously used by both homeowners
and businesses.
✓ Think about the possible use of waste materials for the
production of other useful and marketable items.
✓ Man-made waste has a detrimental effect on the environment.
✓ In most cases, companies are keen to work with entrepreneurs
✓ Recycling may be done with waste products that come from
agricultural processing, household garbage, used machinery and
appliances or industrial waste.
✓ People throw out food that could be used to make compost or
animal feed.
✓ They also throw away paper, glass and aluminium that can be
recycled.
✓ Think of things that can be made from what others thought
was garbage
 SCANNING THE ENVIRONMENT
d. Import Substitution
✓ Can you think of anything that is imported that might be
made locally?
✓ Some imported goods have high import duties, making them
very expensive.
✓ You could investigate the possibility of operating a business
that can easily make the imported goods locally

e. Trade Fairs and Exhibitions

✓ Organizations hold trade fairs for different goods or services.
✓ Attending these fairs may give you exposure to a number of
new business ideas that you had not previously considered.
✓ Be sure to attend any trade fair for fields
of business in which you may be interested
 SCANNING THE ENVIRONMENT
f. Publications
✓ Publication from the internet and other printed material may
help you find ideas.
✓ There are many sites on the internet that you can visit to find
out about business ideas as well as franchise businesses for
sale.
✓ There are also web-based businesses that you can search
from home if you have internet connection.
✓ Newspapers are a great source of ideas. They often describe
types of businesses that you could start or products that you
could provide in your area.
✓ The classified advertisements may give you ideas, as well
as articles about business trends in other places
 BRAINSTORMING
✓ Brainstorming means opening up your mind and thinking
about many different ideas.
✓ You start with a word or a topic and then write down
everything that comes to mind relating to that subject.
✓ You continue writing for as long as possible, putting down
things that you think of, even if they seem irrelevant or odd.
✓ Good ideas can come from concepts that initially seem
strange.
✓ Brainstorming works best in a group.
✓ Get your family or friends together and ask them to help
by writing down ideas they have when they hear the word or
subject matter.
 STRUCTURED BRAINSTORMING
✓ Structured brainstorming is when you think of the different
processes that are involved in the operation of a particular
business and the goods/services that can be offered with
respect to those processes.
✓ This is different from thinking about random items related
to a particular business field and type.
✓ Try to think of all the businesses that are related to different
aspects of a product:
• Those involved in production
• Those involved in the selling process
• Those involved in recycling or re-using materials
• Those indirectly related (spin-offs)
• Those involved in servicing
STRUCTURED BRAINSTORMING
 STRUCTURED BRAINSTORMING
✓ You can think of different processes within each line.
✓ You continue until you have run out of ideas.
✓ Again, whatever comes to mind should be written down.
Decide later if it is worthwhile or correct.
✓ Let’s take the example of cotton T-shirts:
 SCREENING YOUR IDEA LIST
✓ You now have your own idea list!
✓ Although each of your business ideas has been described,
there is probably still a lot you do not know about the businesses
on the list.
✓ The questions below will help you to continue to get more
information and to make a shorter list with the three best ideas
• Where can you get advice and information about this business?
• Will this be the only business of this type in your area?
• If there are other similar businesses, how will you be able to
successfully compete with them?
• What is your competitive advantage?
• For example, would you be providing more efficient goods and
services that would eventually replace those that exist at the
moment?
• Would your business eventually show higher growth rates than
existing businesses as a result of the advantages?
• Why do you think this business will be viable?
 SCREENING YOUR IDEA LIST
• Does this business need equipment, premises or
qualified staff?
• Do you think you will be able to get the finances to
provide these things?
• Where will you get the resources to start this
business?
• Could your business model save money by reducing,
re-using or recycling?
✓ To answer these questions objectively, you should
get more information by doing a field study
 FIELD STUDY
✓ By talking to possible future customers or suppliers and
to members of the business community, you can gather
useful information about the factors that would affect your
business idea.
✓ You could just have informal discussions and make
observations or you could arrange more formal visits and
interviews.
✓ The visits will take time and effort, but by doing field
research, you would already be starting to act like a
successful businessperson.
✓ The contacts you make during these visits would also be
useful when you start your business
✓ Ask open-ended questions using the “who”, “what”, “why”,
“where”, “when”, “how” methodology of getting more
information.
✓ Let the conversation flow naturally
 FIELD STUDY
Who to talk to
There are four important groups that you should talk to:
• Potential customers: Their views are essential to your
understanding of whether or not your proposed product is
important to them and if you need to modify your idea to meet
their needs.
• Competitors, suppliers and entities with financial resources:
Their views will reveal the challenges of competition that you
would face, as well as other issues related to your potential
business.
• Financial institutions: Find out the lending requirements to
determine whether borrowing for a new business is possible.
• Key informants and opinion leaders: These are people who
would know a lot about the type and field of business you want
to go into and about your potential customers. Their views
would give you a lot to think about and could also give you a
better insight into the feasibility of your business idea
 SWOT ANALYSIS
✓ Think carefully about the strengths and weaknesses within the
business. These may be personal characteristics, financial issues,
marketing issues, the location of the business or the cost of
promoting and selling your product. Write all of them down.
✓ Think of the external environment for this business. What are
the opportunities and threats in your business
environment? The “key informants” you spoke to during your field
research may have pointed these out to you.
Write them down.
✓ Ask yourself:
• Can I combine my strengths with the opportunities to create a
big advantage?
• What disadvantages are created by the weaknesses and the
threats? Can I overcome them? How?
✓ Then write down the advantages and disadvantages, as well
as how you intend to overcome them.
 YOUR BUSINESS IDEA
✓ If you have decided on the right idea, congratulations!
✓ Now you can complete a summary of your business idea in
the box below
 CONCLUSION
If you are still undecided, do not worry!
The purpose of this manual is to help you prepare yourself
before you start a business.
✓ Try to clarify what causes your reticence:
• Are you unsure about your personal capability? Do you think
you are not capable of being an entrepreneur?
• Are you unsure about a market with an unmet need that you
can fulfil?
• Are you unsure of which idea you want to pursue because
you have many ideas that you are considering?
• Are you unsure whether or not you have sufficiently analysed
and compared your ideas?
✓ In all cases you now have a better understanding of what it
takes to find a good business idea.
✓ If you are not ready yet, keep working on it and you will get
there!